Meet Your American Idol (of Stock Picking)

Sunjay Gorawara is a student at Indiana University. Wall Street types may not know where that is. (Guys, just rent “Breaking Away.”)

Bloomberg News

This is Simon Cowell. Not Sunjay Gorawara

Gorawara also earned a coveted spot among the Wall Street glitterati at this year's Ira Sohn conference and went head-to-head against once of its biggest short-seller presenters: Steve Eisman.

Last year, Eisman took the stage to give a presentation, "Subprime Goes to College," which outlined why he was short stocks of for-profit education companies. In the last year, short-sellers, lawmakers and for-profit college have been embroiled in an intense battle over their role in higher education.

Gorawara, however, issued a rebuttal on why he was long one of those companies, Bridgepoint Education. His efforts won him the Ira Sohn stock picking contest at today’s event. (Our buddy the Reformed Broker referred to this as the “American Idol of stock picking." We like it.)

Bridgepoint is up about 22% this year, and 13% higher in today’s session. On hearing about the surge in Bridgepoint stock today, Gorawara said, "Really? Wow! I'm just happy to be here!" (Sure, sure. And Meryl Streep is just happy to be nominated for all those Oscars.)

Gorawara, who flashed an image of Eisman early in his presentation, cited a lesson from his mother in his stock picking rationale: "Stereotyping may cause you miss out on a few unique individuals," he says. "The broad brush may cause you to miss out."

Short interest in for-profit stocks, including Bridgepoint, has reached record levels. But Gorawara tried to make the case that Bridgepoint was different than some of its competitors.

He argued that its typical student (a thirty-something woman) was more likely to benefit from its programs than a typical for-profit student elsewhere, who may be in his or her early twenties and merely lulling through a bout of unemployment.

Further, he argued that dropout rates at Bridgepoint could be overstated, as well as how drastically they could be impacted by the "gainful employment" regulations the Department of Education is employing.

Eisman, in his own investment presentation, said he hadn't planned to discuss for-profit schools and he didn't attempt a retort against the contest winner.

Eisman did say his parents, who were in the audience, were probably disappointed in the photo of him that Gorawara chose for his PowerPoint presentation. He joked he was sure his mother had turned to father to say, "he's a lot more handsome than that."